Strength and Seasonality: Two Forces at Odds?
Historic momentum meets a historically weak season — which will win?
Special Announcement:
I’m Speaking at TSAA-SF Annual Conference This September
I’m honored to share that I’ll be speaking at the 2025 TSAA-SF Annual Conference on Friday, September 5th at Golden Gate University in San Francisco.
This annual gathering brings together some of the top minds in technical analysis. I’ll be joining Katie Stockton, Jeff Hirsch, Scott Richter, and Zoë Bollinger.
Attendance is free with TSAA-SF membership, and available both in‑person and via Zoom.
📍 Golden Gate University, San Francisco
🗓 Friday, September 5, 2025
Full details → www.tsaasf.org
The Markets
It’s been a busy stretch for the markets.
For the first time since April, SPY and QQQ closed below their 21-day moving averages.
That’s a shift in tone — even if it’s only short-term.
Earnings season has been strong.
Roughly 83% of S&P 500 companies have beaten estimates so far — hat tip to my friend Jay Woods for flagging this on CNBC.
The MAG7 mostly delivered:
Microsoft crushed expectations on Azure growth.
Meta surged after blowout ad revenue and AI momentum.
Apple beat estimates, but results landed softly.
Amazon beat on paper, but guidance disappointed — sending shares lower.
Bitcoin broke lower from its recent consolidation.
The Dollar surged, hit resistance, then backed off.
Volatility spiked, then eased — but the defensive tone lingers.
And Palantir?
Officially a $1B-per-quarter revenue machine.
Stock’s acting well.
Strength and Seasonality: Two Forces at Odds?
Let’s start with the strength.
The S&P 500 just ended an incredible run — 68 consecutive trading days above its 20-day moving average.
That’s rare.
It’s only happened eight other times since 1950.
Seven of those times, the market was higher a year later.
The past four? Double-digit gains.
(source)
Now the seasonality.
In second-term post-election years, August has always been red — going back to 1950.
Eisenhower ’57. Nixon ’73. Reagan ’85. Clinton ’97. Bush ’05. Obama ’13.
And now, Trump ’25.
(source)
So which force wins?
Historic strength coming off a rare streak — or seasonal weakness in a historically soft month?
What We Saw Then
Two weeks ago — in the July 19th📈 Weekly Charts 📉 article — I flagged something subtle but important.
The Bullish Percent Indexes ($BPSPX, $BPNDX, $BPNYA) were starting to crack from high-level consolidations.
Not a screaming sell signal.
But an early hint that breadth was weakening under the surface.
I wrote then:
“Stay alert. This could be the earliest sign of change.”
That was your first breadcrumb.
A heads-up that risk was rising — even as indexes kept printing highs.
Fast-forward to now:
SPY and QQQ have closed below their 21-day moving averages for the first time since April.
Volatility spiked.
Seasonal headwinds are pressing in.
The signal worked.
If you kept risk tight and stayed selective, you were ready.
The Charts
Let’s run through the major indexes and key assets to see where the setups stand now.
SPY has recaptured roughly half of the losses from late last week. The 8-day MA has kept a lid on price for two days, and the index ETF closes back below the 21-day MA once again today.
Stay aware of the potential for more downside by watching AVWAPs at ~$623 and ~$612 as well as the February pivot high and 50-day MA, both near $615 — a very logical potential landing area for any additional selloff.
RSI is holding the bullish upper half so far while volume reverts to the average.
QQQ is still moving in lockstep with SPY. The same AVWAPs, MAs, RSI, and February pivot high apply here as well.
IWM has given a more hopeful bounce after printing the hammer candle below the AVWAP, 50 and 200-day MAs last week. Today’s price is above the 8-day and closed the sessions strongly.
~$216 is still a critical level.
DIA and IWM move together much like SPY and QQQ. ~$436 is the critical level to watch here. Also, both the Industrials and Small-Caps have weaker RSIs.
TLT has continued strength, moving above all but the 200-day MA and into the pivot high from June.
DX1! had a good thing going, but couldn’t handle the rejection near the 100-day MA. It is, however, showing a sequence of higher highs and higher lows — something it has not done so far in 2025.
BTCUSD is beneath the recent consolidation area and trying to stay above its 50-day MA as the June pivot low AVWAP acts as a magnet. ~109k is the ultimate level to hold.
VIX jumped a quick 48% last week before settling back into the high teens. Now we see if it continues to work its way higher, or if that was a one-time summer spike.
The Trade
Patience wins here.
No need to press.
No need to chase.
This market is strong — not breaking down fast or hard.
Every dip so far has found buyers.
That resilience matters — and it means the seasonal pullback we’re watching for could be a gift.
Your job now?
Be patient but diligent.
Ready, able, and willing to buy pullbacks in your favorite names and setups.
The best trades will come when strong stocks reset into constructive zones.
That’s when you step in with size.
Until then — protect capital, manage risk, and let price confirm the opportunity.
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